What Does Insurance Cover in a Borrowed Car?

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Do you loan your car out to someone regularly? Maybe a family member or a friend?

Or do you borrow someone else’s vehicle on a regular basis, maybe to run to the store or to get to work every once in a while?

If you answered yes to either of those, you should know about what is covered in the event an accident occurs. While nobody wants to think about getting into a car accident, we know they happen on a regular basis. Out of the thousands of vehicle accidents during West Virginia’s latest reporting year, the data shows us that there were over 250 fatalities and more than 1,380 serious injuries.

Who and what is covered in a borrowed car?

We have all driver someone else’s vehicle before but did you ever bother to wonder if you were covered by an insurance policy? The answer depends largely on whether or not you had permission to use the vehicle beforehand.

The answer to whether you are covered by insurance when in a borrowed car is usually going to be – yes, you are covered. The insurance of the person who owns the vehicle stays with that vehicle and covers whoever happens to have permission to operate it.

If you are in an accident in a borrowed car, that is good news, especially if you do not have vehicle insurance yourself. If you loaned your vehicle to someone else and there was an accident, this is going to hit you with a double whammy, especially if the person who you loaned the car to was at-fault in the accident. You will likely be held responsible for any financial damages, including the deductible (unless the person you loaned the vehicle to graciously offers to help with these expenses).

Ouch, that means that the person who loans a vehicle that crashes could also be looking at higher insurance rates in the aftermath of a crash.

None of this is looking good for the person who loans a car that gets into an accident.

Before you borrow a car

You should know the limits on the vehicle owner’s insurance policy before you borrow a car. While most auto insurance policies will cover someone who borrows the car with permission, there are instances where they may not. You need to ask, and get answers to, these questions before borrowing a car:

  • How often do you borrow the vehicle?
  • Are you considered a member of the owner’s household?
  • Is the car being used for business purposes?

Insurance carriers usually feature clauses in the policies that allow the owner to occasionally lend their vehicle to someone and have the insurance still apply. However, the company extended the policy (and their rates) based off of the assumption the car’s owner would be the primary driver. Insurance carriers will typically charge more for additional regular drivers and business purposes.

It all depends on the frequency

If you plan to regularly borrow someone’s vehicle, or loan your vehicle out to another person regularly, it may be time to add that person to your insurance policy. This will help keep everyone protected in the event an accident occurs. Insurance companies are not your friend in a regular accident situation, so imagine how difficult they will be if someone crashes a borrowed car.